And am on Step 3. I'm setting this up on localhost for development and then I'll publish to Azure Websites with a different App ID. I'd like to have this working on localhost first though. (I haven't tried this with a non-localhost domain yet.)

There is also a link to this question: Running Facebook application on localhost
Again, they suggest Site URL. They also talk about app-canvas which is not something I'm using and I don't see how it would be related to login.

For what it's worth, before I set the Site URL and Domain, I was getting a different error - one that told me I needed to set the Site URL.

I think the App I was using was busted. I created a new App on Facebook and it worked fine. The old one I was using I had created about 10 years ago and never did anything with it. Maybe something changed since then...
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MattDFeb 2 '13 at 23:26